Intel Corporation (NASDAQ:INTC), over the past year, has remained one of Cramer’s favorite stocks. The shares are up by 302% over the past year and by 107% year-to-date. Most of the CNBC TV host’s optimism about the firm stems from its CEO, Lip-Bu Tan. He has continuously praised Tan’s experience in the industry and remarked that he is the right person to turn the firm around. In his comments about Intel Corporation (NASDAQ:INTC) on Monday, Cramer commented that the firm had a diversified business that ranged from making chips for itself to packaging them and operating a foundry business:
“No it was a horrible day, and the day starts with Intel, and, Intel’s looking so much up, that I’m saying, ha ha ha, when I get back, Carl’s going to have to say, how did you know? By the end of the day, I was hoping that Carl wouldn’t say, Jim, what were you thinking? Because that’s what happens when a stock starts at 109 and it’s at 93.
“. . .I believe in Intel passionately. . .Intel’s got, it’s got packaging, it’s got foundry. It is so much that’s better.”
Intel Corp.’s headquarters, the Robert Noyce Building in Santa Clara, California. Photo from Intel Corp website
Intel Corporation (NASDAQ:INTC)’s foundry business and its plans to expand its US manufacturing footprint are also at the center of the debate for the firm. Setting up chip fabrication facilities is an expensive endeavor, and investor opinion is divided on the feasibility of these plans. As part of its second-quarter earnings release, Intel Corporation (NASDAQ:INTC) raised its capital expenditure guidance to over $20 billion for 2026.
The bears are worried that while the firm’s own chips are selling well, to ensure the success of its foundry business, it will have to gain major orders from firms such as Apple and NVIDIA in order to recover the investment in its foundry business. Intel Corporation (NASDAQ:INTC)’s bulls point towards its revenue growth rate (Q2 revenue up by 25.4% annually), but the bears note that high valuation multiples, such as a 158x forward P/E ratio for June 2026, indicate that the optimism might be a bit excessive. Another worrying factor is Intel Corporation (NASDAQ:INTC)’s high debt load, with total debt crossing $50 billion in Q2 potentially affecting free cash flow unless margins remain robust and grow.
Shifting to the hedge funds, sentiment appears to be improving, as, while during Q4 2025, 96 out of the 1,041 hedge funds part of Insider Monkey’s database had owned a stake in Intel Corporation (NASDAQ:INTC), the figure grew to 112 out of 1,022 in Q1 2026. Short interest in the stock was 2.4% of both the float and shares outstanding as of mid-July. One notable move on the hedge fund front in Q1 was D E Shaw growing its stake by 183% to $748 million.
While we acknowledge the potential of INTC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than INTC and that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
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